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Heavy Fighting Drains Ukraine Government’s Options And Finances

KIEV, Ukraine -- Ukrainian troops beat back fresh attacks by pro-Russia militants on a crucial rail hub Tuesday, part of recent heavy fighting that is sapping the Ukrainian administration of options and finances as it works to fend off a wider Russian-supported onslaught.

President Petro Poroshenko attends Auschwitz ceremonies Tuesday.

U.S. and European leaders threatened new sanctions in the wake of a rebel rocket attack that killed dozens of Ukrainian civilians over the weekend, but Russian President Vladimir Putin appeared ready to shrug off any new measures.

On Tuesday, he continued to blame Kiev for the fighting and for “gunning down civilians in cold blood.”

The Kremlin denies giving support to pro-Russia rebels in eastern Ukraine or sending Russian troops, which Kiev said on Tuesday numbered as many as 15,000.

Kiev and Western officials say a fresh infusion of Russian armor in the past two weeks has been feeding the latest offensive against Ukrainian troops, who last week fell back from a long-contested airport outside the eastern city of Donetsk and are now in danger of encirclement at a rail hub in the provincial city of Debaltseve.

Ukraine’s army has mostly held its own along other sectors of a long north-south front but is constrained from mounting a serious counteroffensive that Ukrainian and Western officials fear could trigger an even larger Russian military response.

President Petro Poroshenko’s government, meanwhile, will run out of money without fresh multibillion-dollar injections from the International Monetary Fund and other official Western sources.

Western donors are prodding Mr. Poroshenko to show his creditworthiness by more aggressively rooting out government corruption—an arduous task, Ukrainian officials say, as the country fights a war.

If Mr. Poroshenko agrees to a new cease-fire and a pullback of his forces, he would effectively give up rebel-held territory, undermining political support in Kiev, where parliament voted Tuesday to declare Russia an aggressor and the separatist governments terrorist organizations.

But continuing to stand up to Russia without significant military support from the West could lead to further losses of both territory and men, deepening Ukraine’s financial woes.

Ukraine’s economy contracted 7.5% in 2014, and central bank reserves shrank to $7.5 billion in December, the lowest in more than a decade.

Ukraine’s currency, the hryvnia, hit fresh lows on Tuesday after losing half of its value against the dollar last year.

“He’s between a rock and a hard place, between a deal with Putin and increasingly radicalized Ukrainian public opinion that is not prone to compromise,” said Adrian Karatnycky, a senior fellow at the Atlantic Council, a Washington-based think tank.

Western officials had hoped Moscow would be forced to back down through a combination of sanctions and financial pain after the plunge in the price for crude oil, Russia’s main export.

But Putin has been unwilling to order militants to return control of the Ukraine-Russia border to Kiev, a crucial point of the September deal.

Indeed, Putin ramped up his rhetoric this week, blaming Kiev for the upsurge in violence and calling Ukraine an instrument being used by the North Atlantic Treaty Organization to contain Russia.

Amid a deepening chill with the West, Putin didn’t attend a ceremony in Poland at the Auschwitz-Birkenau concentration camp, which was liberated by the Soviet army on Jan. 27, 1945.

In the run-up to the ceremony in Poland, Warsaw’s foreign minister angered the Kremlin by saying that Ukrainian soldiers, rather than the Soviet army, liberated the camp.

At a ceremony Tuesday at a Jewish museum in Moscow, Putin decried what he called attempts to rewrite history, and drew parallels between World War II and events in Ukraine, where the Kremlin says Kiev is brutalizing an ethnic Russian minority.

“We all know how dangerous and destructive are double standards, indifference to and disregard to another man’s fate, as is the case with the current tragedy in Ukraine,” Putin said.

For now, Kiev says its forces don’t face a massive defeat like in August, and that a rocket attack on the coastal city of Mariupol appears to have been a feint.

Government forces and rebels are concentrated around Debaltseve, an important rail junction between the two rebel capitals, with the militants pushing to surround it while pounding it with rockets and artillery.

The encirclement of the town is likely a precursor to an assault that could come in the next week, Ukrainian officials say.

Still, Putin also is constrained from more significant intervention by the threat of tougher Western sanctions and unpredictable reaction from the Russian public if the number of Russian deaths in Ukraine increased.

A Ukrainian security spokesman said nine Ukrainian servicemen were killed and 30 wounded in the past 24 hours, but officials also noted some successes.

The Ukrainian Ministry of Defense said its forces had destroyed four rebel tanks, nine armored vehicles, more than a dozen rocket systems and six airplanes that rebels apparently had been trying to bring into service.

With no offensive possible, Ukrainian units have for now settled into a strategy of punishing the rebels with artillery strikes as they advance.

After Russia gave sophisticated antiaircraft weaponry to separatists last summer, officials say that Ukraine’s air force has been unable to operate in the conflict zone even for reconnaissance and spotting targets for artillery.

Ukraine’s requests for lethal aid—especially antitank weaponry—have been turned down by the U.S., but its artillery has been improved lately by U.S.-supplied equipment that detect the source of incoming rounds from rebel territory.

The U.S. also has begun providing armored trucks to Ukrainian troops and last week announced it would send military advisers to Ukraine for the first time since the war in eastern Ukraine began.

In a visit to Ukraine last week the head of the U.S. Army in Europe, Lt. Gen. Ben Hodges, said the advisers will be based far from the fighting at a base near the western provincial city of Lviv, where they will train four companies of Ukrainian national guard.

Previously, the U.S. has limited its advisers to first aid.Source: The Wall Street Journal